Commercial Lines Underwriting Flashcards
6 cards from real PGI practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 Commercial Lines Underwriting flashcards as text
What is 'directors and officers' (D&O) liability insurance and why has it become important in Singapore?
Answer: Coverage for directors and officers against personal liability for wrongful acts in managing the company, including regulatory investigations and shareholder claims
D&O insurance covers directors and officers for personal liability arising from alleged wrongful acts in their management capacity — including regulatory investigations, shareholder suits, employment disputes, and misrepresentation claims. Singapore's increased regulatory activity has heightened demand.
What is 'cyber liability insurance' and what risks does it address for Singapore businesses?
Answer: Coverage for losses arising from data breaches, cyber attacks, business interruption from IT failures, and third-party liability for compromised customer data
Cyber liability insurance covers first-party losses (incident response costs, business interruption, ransom payments) and third-party liability (regulatory fines, customer notification costs, legal liability for data breach) arising from cyber incidents and data breaches.
What is 'environmental liability insurance' and when is it required in Singapore?
Answer: Coverage for the insured's legal liability for pollution and environmental damage caused by their operations or premises, required for high-risk industries
Environmental liability insurance covers the insured's liability for pollution, contamination, and environmental damage. In Singapore, high-risk industries (chemical, petroleum) are increasingly expected or required to carry this coverage, complementing regulatory environmental compliance obligations.
What does 'blanket coverage' versus 'specific coverage' mean in commercial property insurance?
Answer: Blanket insures multiple locations or items under a single combined sum insured; specific assigns a separate sum insured to each location or item
Blanket coverage insures multiple locations or items under one combined sum insured, allowing flexibility (underperformance at one location offset by another). Specific coverage assigns separate sums insured to each location or item, limiting flexibility but providing clarity.
What is 'gross profit' basis in business interruption insurance and how is it defined?
Answer: Turnover less uninsured (variable) costs — the amount that varies with sales activity — representing what the business needs to maintain fixed costs and profit
Gross profit in BI insurance is calculated as Turnover minus Uninsured Working Expenses (variable costs that reduce proportionally with reduced activity). This is the amount available to pay fixed charges (rent, fixed wages, insurance) and net profit — what BI insurance protects.
What is a 'loss prevention' survey and how does it affect commercial underwriting in Singapore?
Answer: An inspection of the insured's premises and operations to identify and recommend improvements to reduce loss frequency and severity, typically improving underwriting terms
A loss prevention survey involves a technical inspection of the insured's facilities to identify hazards, assess existing controls, and recommend improvements. A favourable survey demonstrating good risk management practices can improve underwriting terms and premiums.